In October of 1996, HCFA(now known as CMS) initiated a demonstration project to allow reimbursement of teleconsulting services by Medicare beneficiaries at 57 Medicare-certified facilities. The objectives of this project are to assess the feasibility, acceptability, cost, quality, and access to services that could be made available through Medicare reimbursement for teleconsultation.

Prior to this demonstration project, HCFA(now known as CMS) contracted with the University of Colorado Health Sciences Center (UCHSC) to perform a preliminary study of telemedicine, conducted during 1993-1995. HCFA(now known as CMS) evaluated the program in terms of: 1) utilization, 2) access to care, 3) clinical efficacy and cost-effectiveness, 4) quality (both process and outcome), and 5) reasonableness of charges (considered to be a component of patient satisfaction). This effort involved a literature review, development of a conceptual framework for the analysis of studies examining effectiveness, selected case studies, a review of coverage policies of private third-party payers, and examination of utilization review and quality assurance/improvement models currently in operation as part of existing telemedicine systems.

The study concluded that few telemedicine services are actually being provided. Regarding clinical effectiveness of telemedicine, most scientific literature at the time pertained to teleradiology and telepathology. The report concluded that "very few papers had been published concerning other applications of telemedicine, and the majority of articles that could be found were descriptions of applications rather than empirical research.

At the time of the preliminary study of telemedicine, there were no studies of cost effectiveness for any application of telemedicine, though some estimates were being made of "potential cost reductions" due to the availability of teleconferencing for remote consultations and continuing education, in a report published by Arthur D. Little, Inc., in 1992. The report concluded that "there were no data [to] test the validity of the model (outlined in the report) and thereby illuminate the matter of telemedicine's possible cost effectiveness."

A new HCFA(now known as CMS) demonstration project on the use of telemedicine for management of diabetes, titled "Informatics, Telemedicine, and Education Demonstration," is using specially modified home computers as "home telemedicine units" (HTU) linked to a clinical information system (CIS) maintained by Columbia Presbyterian Medical Center in New York City. The HTUs in patients' homes allow video conferencing, access to health information and access to medical data. Computerized devices read blood sugar levels, check blood pressure, take pictures of skin and feet for signs of infection, and screen for other factors that affect the management of diabetes. These data are fed electronically to the data system at Columbia. The CIS provides storage of clinical data for use in the development and application of patient care guidelines and clinical standards. Full-time nurse case-managers monitor the data and intervene if the data from a patient vary from guidelines. Patients receive feedback, including clinical data such as blood glucose levels, care reminders and suggestions on how to maintain good health.

The demonstration project is being conducted as an RCT. Half of the participants are receiving the intervention, consisting of an HTU and electronic services within a case-manager environment, and half continue to receive usual care for their diabetes. The demonstration consists of two components: an urban component in northern Manhattan, and a rural component in upstate New York.

The evaluation of this demonstration will consist of the following components:

Physician profile. This is an analysis of differences between physicians participating in the demonstration and those not participating. Possible comparison groups include physicians approached for participation but who declined, and non-participating primary care physicians in the same geographic area. HCFA(now known as CMS) hopes to gain insight into whether specific characteristics of the physician might affect the probability of use of HTUs by the physician, which may have implications for the ultimate diffusion of the technology.

Patterns of use analysis. This analysis will look at HTU utilization patterns over time by project participants, including separate descriptions for rural vs. urban, male vs. female, and younger vs. older participants.

Analysis of access. This will compare the participants randomized to receive the intervention to the control group randomized to receive their usual diabetes care, using both an "intent to treat" and a "completer" analysis.

Analysis of quality of life. Standard quality of life questionnaires will be used to compare baseline measures to follow-up measures for both the intervention and the control groups.

Cost analysis. The primary analysis will be from the perspective of Medicare. The total Medicare expenditures per person for the control group will be compared to the total Medicare expenditures plus the intervention costs for the intervention group. A secondary analysis will consider non-Medicare covered expenses.

Other HCFA(now known as CMS) telemedicine evaluations include demonstrations in Georgia and West Virginia.

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